Everything you need to know about the key differences between personnel management and human resource management.
Personnel management is more administrative in nature, dealing with payroll, complying with employment law and handling related tasks.
While HR on the other hand, is responsible for managing a workforce as one of the primary resource that contributes to the success of an organization.
Human resource management is described as much broader in scope than personnel management. HR is said to incorporate and develop personnel management task while seeking to create and develop teams of workers for the benefit of the organization. A primary goal of HR is to enable employees to work to maximum levels of efficiency.
Difference between Personnel Management and Human Resource Management
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Difference # Personnel Management:
As per the Indian Institute of Personnel Management (National Institute of Personnel Management) – Personnel Management or Labor Management or Staff Management means quite simply the task of dealing with human relationships within an organization.
Academically the three aspects of Personnel Management are- (i) The welfare aspect concerned with working conditions and amenities such as canteens, creches, housing, personal problems of workers, schools, and recreation; (ii) The labor or personnel aspect concerned with recruitment, placement of employees, remuneration, promotion, incentives, productivity, etc., (iii) The industrial relations aspects concerned with trade union negotiations, settlement of industrial disputes, joint consultation and collective bargaining.
All these aspects are concerned with human element in industry as distinct from the mechanical aspect. As per Lawrence Appley “It is the function of guiding human resources into a dynamic organization that attains its objectives with a high degree of morale and to the satisfaction of those concerned. It is concerned with getting results though people”.
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According to him — all management is personnel management as it deals with human beings; its development can be best being discussed in terms of human development, philosophical, psychological, spiritual and physical. From the above, we understand that firstly Personnel Management is concerned with managing people at work. Such people or personnel do not simply refer to rank and file employees or un-unionized labor but also includes higher personnel and non-unionized labor.
In other words, it covers all levels of personnel, including blue-collared employees and white-collared employees. The shape and form that personnel administrative activity takes, however, may differ greatly from company to company; and to be effective, it must be tailored to fit the individual needs of each organization.
Secondly, it is concerned with employees, both as individuals as well as a group, the aim being to get better results with their collaboration and active involvement in the organization’s activities i.e. it is a function or process or activity aiding and directing workmen and women in maximizing their personal contributions.
Difference # Human Resource Management:
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The term Human Resource at the macro level indicates the sum of all the components of human characteristics possessed by all the people. Here characteristics refer to skills creative ability, mental and physical stability and other psychological aspects. Human element refers to all the people employed, self-employed, unemployed, employers and owners.
Human resource at the organizational level includes all the component resources of all employees like managing director, board of directors, persons who work on honorary basis, experts drawn from, various organization, and those people (family members) influencing the human resource of the former group. In short, it includes the resources of all the people who contribute their services to the attainment of organizational goals and others who constitute their services in order to create hurdles in the attainment of organizational goals. Human resource also includes human values.
Thus, the term human resource is much broader compared to the term personnel either at the component level or at organizational level or even at the macro level. So, human resource management at organizational level does mean management of the dynamic components (resources) of all the people at all levels in the organizational hierarchy round the clock and through the year.
Though personnel management and human resource management can be differentiated academically, more or less they deal with human aspect of the organization i.e. the management of men. In one nutshell, we can say human resource management deals with human being as a resource in production activity rather than an employee.
Just as materials manager works with material as a resource required for production, production manager works with machines as resource required for production, so also human resource manager considers human beings (employees) as resource required for production. The difference between human resource and other resources is human resource has mind, brain, thinking and understanding capacity, it can increase its capacity or decrease its capacity as per its will, whereas other resources cannot do it by themselves.
Difference between Personnel Management and Human Resource Management: 6 Points
Some people use the terms ‘Personnel Management’ and ‘Human Resource Management’ (HRM) interchangeably. They feel that HRM is an old wine in a new bottle. But this is not true because HRM is based on ‘human resource’ orientation which was missing in personnel management.
Whereas personnel management is a routine administrative activity, HRM is integrated into the overall strategic management of the enterprise.
The major points of distinction between the two have been given below:
Difference # Personnel Management:
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1. Philosophy – Treats people as a tool to be replaced when worn-out.
2. Nature of activity – Routine activity to hire and train employees and maintain personnel records.
3. Managerial outlook – Concentrates on monitoring people and work in terms of measurable output.
4. Shared interests – Interests of the organisation are more important.
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5. Responsibility – Major responsibility rests with the HR Manager
6. Humanisation – Emphasises operative functions of Personnel Manager, i.e., acquisition, training compensation, appraisal, etc.
Difference # Human Resource Management:
1. Philosophy – Treats people as valuable assets or resources.
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2. Nature of activity – Strategic activity integrated into the strategic management of business.
3. Managerial outlook – Focuses on nurturing human talent.
4. Shared interests – Interests of both the organisation and the employees are equality important.
5. Responsibility – Responsibility rests with all managers: top, middle and lower/first-line managers
6. Humanisation – Emphasises humanisation of management, i.e., concentration on human relations, motivation, job satisfaction, welfare, etc.
Difference between Personnel Management and Human Resource Management
Difference # Personnel Management:
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1. PM is a functional area and a function.
2. PM is one of the functional areas in HRM.
3. Labour treated as a tool which is expandable and replaceable.
4. Interest of organization are uppermost
5. PM is interested in the orderly way of administration.
6. PM is primarily concerned with selection, recruitment and administration of manpower.
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7. Managing people for maximizing output is the basic of PM.
8. Maintaining records, enforcing rules, punishing the guilty and the administration of HRM.
9. PM is more concerned with preserving information and maintaining the secrecy of information.
10. PM is so important function meant only to hire employees and maintain their records.
11. PM precedes HRM.
Difference # Human Resource Management:
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1. HRM is primarily a philosophy, an attitude an approach, a policy and a practice.
2. HRM must remain at the centre of Management itself.
3. Treats people as a resource or as a set used for the benefit of an organization, its employees and society as a whole.
4. A distinct philosophy of Management aiming at mutuality of interests.
5. HRM intervention is more concerned with people, team building and team work.
6. HRM concentrates more on motivation, morale, boosting and job satisfaction.
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7. HRD is at the centre of HRM.
8. Counselling, career planning, developing and correcting and keeping of HRM determining more important aspects intact are the concern of PM.
9. Communication system is one of the most indispensable tasks of HRM.
10. Integrated into overall strategic management
11. Latest in the evolution of the subject.
Difference between Personnel Management and Human Resource Management: 24 Key Differences
1. Personnel management is more administrative in nature, dealing with payroll, complying with employment law and handling related tasks. While HR on the other hand, is responsible for managing a workforce as one of the primary resource that contributes to the success of an organization.
2. Human resource is described as much broader in scope than personnel management. HR is said to incorporate and develop personnel management task while seeking to create and develop teams of workers for the benefit of the organization. A primary goal of HR is to enable employees to work to maximum levels of efficiency.
Personnel management can include administrative task that are both traditional and routine. It can be described as reactive, providing a response to demand and concerns as they are presented, while by contrast, HRM involves on-going strategies to manage and develop and organisation’s work force. It is proactive as it involves the continuous development of functions and policies for the purpose of improving a company’s work force.
3. Personnel management deals with careful description of written contracts HRM aims to go beyond contract.
4. Personnel management is often considered as an independent function of an organization. HRM on the other hand, tends to be an integral part of overall capacity function.
5. Personnel management are rules dominated, while HRM are culture and value dominated.
6. Speed of decisions is very slow in personnel management, while it is fast in case of HRM.
7. Personnel management requires negotiation skills, while HRM requires facilitation skills.
8. In personnel management, training and development are controlled and limited, while in HRM, it is always, improving-learning.
9. Personnel management is typically the sole responsibility of an organisation’s personnel department while in HR, all of an organisation’s managers are often involved in some manner and a chief goal may be to have managers of various departments and develop the skills necessary to handle personnel related tasks.
10. Personnel management requires direct communications, while HRM requires indirect communications.
11. In personnel management, labour is treated as a tool which is expendable and replicable while, HRM people are treated as assets to be used for the benefit of organization. Its employees and the society at large.
12. Personnel management focus on division of labour, while HRM focus on team work.
13. As far as conflict handling is concerned, personnel management reach temporary solutions, while HRM manage climate, culture, and everlasting solutions.
14. Personnel management is collective bargaining contracts, while HRM is individual contracts.
15. Personnel management precedes HRM, while HRM is latest in the evolution of the subject.
16. In personnel management, fixed grades of pay are to be given, while in HRM, performance related pay are to be given.
17. Job categories and grades are many in personnel management, while it is few in HR.
18. Personnel management’s role is transactional, and HRM role is transformational leadership.
19. As far as motivators are concerned, personnel management typically seeks to motivate employees with things such as compensation, bonuses, rewards and the simplification of work responsibilities. From the personnel management’s point of view, employee satisfaction provides the motivation necessary to improve job performance. HRM holds that improved performance leads to employee satisfaction with HR work groups, effective strategies for meeting challenges and job creativity are seen as primary motivators.
20. Personnel management deals with labour management, while HRM deals with customers.
21. Personnel management guide to procedures, while HRM guide to business need.
22. In case of personnel management, managerial task and labour tasks are monitoring while in case of HRM, managerial task and labour tasks are nurturing.
23. In case of personnel management, nature of relations is pluralist, and in case of HRM, it is neo-unitarist.
24. Perception of conflict is institutionalising in personnel management, while it is pathological.
Difference between Personnel Management and Human Resource Management
Human Resources today are called Human Capital and the HR department is called Human Capital Department in some organizations. In earlier times, Human Resources were referred to as Personnel and their management as Personnel Management. The scope and strategic thinking of the function has broadened over time. However there are numerous differences and similarities between Personnel Management and Human Resource Management.
Difference # Personnel Management:
1. Nature of function – Personnel management is routine and maintenance oriented administrative function.
2. Reactive and proactive function – It is mainly reactive and responsive to the demands of organization.
3. Dependency factor – Personal management is viewed as an independent function without regard to organizational strategies and processes.
4. Scope – The scope of personnel management is narrow. It focuses mainly on the recruitment and training function. It is aimed at enhancing the efficiency of personnel.
5. Motivation tools – Personnel management is aimed at motivating the personnel through economic rewards and traditional job design methods.
6. Basic premise – Personnel management considers that job satisfaction and morale are the result and effect of improved performance.
Difference # Human Resource Management:
1. Nature of function- It is function aimed at continuous development of people at work.
2. Reactive and proactive function- It is a proactive function. It is not only concerned with ascertaining the present organizational needs but also concerned with anticipating the future needs and acts.
3. Dependency factor- HRM is viewed as sub system of the organization. It has a close linkage and interface with other functions of the organization.
4. Scope – The scope of HRM is wide in that it not only focuses on improving efficiency of people at work but also creating a proper organizational culture to utilize the efficiency of the employees.
5. Motivation tools – HRM envisages motivation of people at work by satisfying their high order needs like creativity, participative management, challenging work, rewards, autonomous work, group autonomy, etc.
6. Basic premise – HRM operates on premise that the better performance drives up job satisfaction and morale of the employee.
Difference between Personnel Management and Human Resource Management – Explained!
There has been a lot of confusion, misconception over the use of the terms ‘HRM’ and ‘PM’. Some are of the view that both HRM and PM are the same; it is just like ‘old wine in new bottle’. Some opine that HRM is used in place of PM in the same manner as ‘corporate communication’ is used in place of ‘public relation’, or ‘water resources’ is used in place of ‘irrigation’.
Torrington and Hall (1991) commented that PM is ‘workforce centred’ that directs itself to employees while HRM is ‘human resource centred’ and concerns itself with the overall human resource needs of the organization.
Different authors, experts, business magnets have given their views, opinions differently narrating similarities, dis-similarities between the concepts of PM and HRM. The fact emerges that HRM is different from PM in respect of areas/activities, viz. strategic integration, transformational/change leadership generating commitment, total quality and cultural change, workplace learning that creates systemic adaptation and innovation, unitary concept concerning interests of the management and the employees, and in other areas.
J. Storey (2002) has narrated the differentiating aspects in four basic areas viz. beliefs and assumptions, strategic areas, line management and key levers.
However, Human Resource Management and Personnel Management are not entirely different concepts. In some areas these have similarities specifically in the ‘maintenance’ area like employment, collective bargaining functions while in some other areas these show differences to each other.
Difference # Personnel Management (PM):
1. Concept:
PM deals with management of people at work.
2. Functional:
The main functional area of activities of PM includes employment (manpower planning, recruitment selection, placement and induction/orientation) compensation, industrial relations, and training.
3. Approach:
(i) It is a fire-fighting approach i.e., to solve the matter as and when crops up.
(ii) It is an ‘operation-alive’ approach i.e., to keep the operation running.
(iii) It is traditional way of functioning. There is no creativity, no newness in methods of functioning.
(iv) It is controlling approach. Employee’s behaviour, freedom to work are kept restricted/controlled.
4. Strategy:
(i) It does not consider corporate business strategy while designing and implementing plan of action.
(ii) Business strategy has little or no role to play in the process of its functioning.
5. Emphasis:
It gives emphasis on stereotype activities i.e., in maintenance area of activities.
6. Training:
(i) It has limited scope for training. Employees receive training on some specific designated courses.
(ii) Training mechanism for potential development is not used in a systematic way.
(iii) It considers training as ‘expense/ liability’ for the organization.
7. Development:
It has no systematic/ continuous plan of activities for development of people’s skill, competencies.
8. Assumption about Employees:
(i) Employees have no human value under such function. They are considered to be marketable articles ready for sales/ purchase.
(ii) It considers employees as having lower order needs and they remain happy on satiation of physiological needs.
(iii) Application of McGregor Theory X with regard to assumption on behaviour/activities of employees is common.
9. Role:
It has fixed role which is static, rigid, and cannot go beyond the boundary of activities.
10. Competency:
It lacks competence to face challenges arising out of changing organizational environment.
11. Application of Behavioural Theories:
It has limited scope for application of behavioural theories and research outcome in the industrial setting.
12. Deployment Philosophy:
The objective of employee’s deployment is to utilize their services for the betterment/ benefits of the organization.
13. Decision Making and Implementation:
It is slow in decision making and implementation.
Difference # Human Resource Management (HRM):
1. Concept:
HRM deals with management of prime components people at work viz. skill, knowledge, ability, aptitude, value, beliefs, talents, attitudes.
2. Functional:
The main functional area of activities of HRM is employment, motivation, development training and education.
3. Approach:
(i) It is a fire-preventing approach i.e. to take measures so that problems do not occur.
(ii) It is an ‘operation-alive’ approach as also ‘operation diversifying’ approach to suit the changing need of the organization.
(iii) It is an experimenting approach. New techniques, theories are applied in the functioning process in order to find out the outcome.
(iv) It is a self-controlled approach. For performance of work employees exercise self-control, self-direction.
4. Strategy:
(i) It decides/formulates HR strategy in line with corporate business strategy
(ii) Success of its functioning depends on how accurately and to what magnitude it considers corporate business strategy while formulating HR Strategy.
5. Emphasis:
It gives emphasis on development area of activities, i.e., all round development of the people at work.
6. Training:
(i) It has a wider scope for training. Tailor- made training given, assessing training needs/requirement of the employees for performance of the job.
(ii) After identification of potential areas development process starts.
(iii) It considers training as good investment which yields results in near future.
7. Development:
It has people orientation activities. It looks to the development of people at its entirety. It considers development at all levels, i.e. at individual level, dyadic level, group level and organizational level.
8. Assumption about Employees:
(i) It considers employees as assets/resource.
(ii) It considers employees as having all hierarchical needs and after satisfaction of lower order needs they move forward for higher order needs i.e., psychological needs like social needs, esteem needs and self-actualization needs.
(iii) McGregor theory Y contributes much to shape mind set of the HR professional o perceive employees as human resources.
9. Role:
It is flexible and works in a dynamic system which considers changing situational variables in the process of accomplishment of job.
10. Competency:
It has competence, skill to confront challenges as crop up due to situational changes.
11. Application of Behavioural Theories:
It considers organization as learning organization where research results, behaviour theories are constantly used.
12. Deployment Philosophy:
Employee’s services are utilized for the mutual benefit of the organization and the employees.
13. Decision Making and Implementation:
It is very fast in decision making and implementation.
Difference between Personnel Management and Human Resource Management
Difference # Personnel Management:
1. It is basically an administrative recordkeeping function, at the operational level.
2. Does not necessarily aims at integration of corporate strategies.
3. It is workforce centered, directed at the organizational employees.
4. It is an operational function, concerned with day-to-day people management activities.
5. Personnel Management relates to the maintenance of personnel and administrative systems.
6. It does not consider the futuristic approach.
7. Focus is more individualistic.
Difference # Human Resource Management:
1. It is concerned with the development and management of human resources.
2. It integrates with corporate strategies and ensures a healthy culture of an organizations.
3. It is resource centered, directed mainly at management.
4. HRM is strategic in nature and is concerned with the organizational objectives and sustained competitive advantage of the company.
5. HRM is more proactive
6. It is about forecasting of Organisational needs, continuous monitoring and change management.
7. A Unitarist focus where “uni” refers to one and together.
Difference between Personnel Management and Human Resource Management (with Analysis)
The term ‘human resources’ at the macro level spells out the total sum of all the components possessed by all the people, whereas the term ‘personnel’ even at the macro level is limited to all the employees of an organisation.
Human resources even at the organisational level include all the component resources of all employees like managing director, board of directors, persons who work on honorary basis, experts drawn from various organisations and those people influencing the human resources of the entire former group. In short, it includes the resources of all the people who contribute their services in the attainment of organisational goals and others who contribute their services in the attainment of organisational goals.
Thus the term human resources is much wider compared to the term personnel either at the components level or in coverage or even at the macro level. As such human resources management at organisational level does mean management of the dynamic components or all the people at all level in the organisational hierarchy round the clock and throughout the year.
Difference # Personnel Management:
(1) Employees are treated as cost and therefore management controls the cost of labour.
(2) Employees are used mostly for organisational benefits.
Difference # HRM:
(1) Employees are treated as a profit centre and therefore invest capital for human resource development and future utility.
(2) Employees are used for the multiple mutual benefits of the organisation, employees and their family members.
The clear analysis of both the terms is presented in the following lines:
(a) The personal approach tends to be tactical in its approach to activities. The focus of the human resource management approach is more strategic.
(b) The personnel approach tends to be short-term and responsive to other demands; the HRM approach is to think of the long-term and institute policies on major new initiatives.
(c) Personnel management tends to rely on traditional forms of communication; HRM tends to use a variety of communication channels.
(d) Personnel management tends to use traditional pay systems; human resources management tends to encourage change and increased flexibility in ways of working.
(e) Personnel management tends to use traditional pay systems; human resource management emphases the need to manage performance and motivate people by the use of various payment systems.
(f) PM’s focus is, therefore on getting the same conditions for groups; HRM focus is on individual contract, payment and reward system.
(g) Personnel managers may sometimes need to help individuals with their problems; human resource managers feel individuals should be prepared to take responsibility for their own decisions and actions.
(h) Personnel managers want a system that is fair for all and are keen to have rules and procedures to encourage this; human resource managers tend to say that people have a right of proper treatment at work and efficient management will achieve this.
(i) Personnel management is a special activity because of the difficulties of working with people; human resource management says that managing people is much the same as managing any other resource.
Difference between Personnel Management and Human Resource Management
Personnel Management and Human Resource Management have some distinctive differences. Personnel management concepts stress the observation of rules and regulations, procedures and contracts. Management strictly follows these rules, procedures and contracts in their activities. Employees strictly adhere to collective bargaining to achieve their demands. Management has profit motives and the workers are interested in sharing the profits.
HRM emphasises reciprocal relations between management and workers on various issues, especially on profit and loss of the enterprise. Strikes and conflicts, etc., are not considered as the desired action to be taken by the employees to settle matters of differences.
Since personnel manager is non-proactive, he cannot have a future vision. His non-proactiveness obstructs him taking result-oriented actions to achieve the organisational goals. He always tries to be the custodian of good employer-employee relation. Since HRM is a proactive management, it takes adequate ‘Proactive measures’ rather than reactive ones in any eventuality.
Personnel managers as line managers always pass on their problems to specialists (staff executives). HRM believes that the managers in the organisation must take keen interest to observe the HRM principles and make the organisation structure more effective through their concerted efforts.
Personnel management follows the principles of collective bargaining and collective arguments with trade union on various matters. HRM speaks of individualisation of collective relation and considers it less important to settle problems through collective bargaining and settlements by trade unions.
HRM would prefer individual settlements. HRM insists on a performance oriented reward system. This means, promotion, increments of pay etc., are to be governed by performance appraisal system and revisions.
Difference between Personnel Management and Human Resource Management
Difference # Personnel Management:
1. Reactive system
2. Collective agreement by management and union
3. Based on performance review and on seniority basis
4. Centralised decision making system
5. Incentive and motivational system
6. Employees commitments are persuaded through democratic management and workers’ union
7. Maintenance oriented management functions.
Difference # Human Resource Management:
1. Proactive system
2. HRM believes in individualization of collective relations
3. Increment of pay, promotion based on performance review
4. Decentralisation of decision making system
5. Principles of making continuous improvement in performance (Kaizen)
6. Employees commitment to work is achieved by conscious decision making, labour management consultation and employees’ conscious involvement in work.
7. Development oriented management functions.
Differences between Personnel Management and Human Resource Management: 9 Major Differences
According to some people there is no difference between HRM and Personnel Management. They assume that both include same functions and HRM is a dignified form of Personnel Management. After taking all the views on comparison of personnel management and human resource management it can be said that both are same but have different nomenclature, also both have some similarities and some differences, and both differ in contents as well as emphasis.
Following are the differences between personnel management and human resource management:
1. Nature:
Human resource management is concerned with the continuous emphasis on the development of people at work whereas personnel management is a routine and administrative function. Further, HRM is the expression of the unshakeable belief of the management of an organization in improving human processes on continuous basis.
2. Scope:
Personnel management is narrow in scope whereas human resource management is wider in scope. This is because personnel management deals with rules and regulations made for the personnel working in the organization. This helps the superior to deal with their subordinate so as to achieve its objectives whereas human resource management recognizes the importance of the employees and makes the policies and programmes for the development of the employees so as to make them the assets of the firm.
3. Focus:
Human resource management has its main focus on the coordination and development of the personnel of the organization whereas personnel management focuses on the achievement of objectives by giving more powers and authority to the managers.
4. Reactive/Proactive:
Human resource management is a proactive function and is not only concerned with the present organisational needs but anticipates future needs and acts accordingly whereas personnel management function is mainly reactive and responds to the demands of an organization whenever they arise.
5. Dependency:
Human resource management is viewed as a sub system of the organization and takes into account its linkages and interfaces with all other parts of the organization. On the other hand the personnel management is seen as independent function and sub functions without giving clue regard to organisational strategies and processes.
6. Objective:
Under human resource management attempt is made not only to make people efficient but to create proper organisational culture to utilize the efficiency whereas personnel management concentrates mainly on improving the efficiency of personnel in isolation without emphasizing the relevance of efficiency in the organisational context.
7. Basis of Communication:
Human resource management constitutes and deals with the help of direct and systematic communication whereas personnel management deals with the indirect communication.
8. Job and Salary:
In case of human resource management the salary structure is related with the performance of employees on the other hand under the personnel management wage and salary is given on the job basis.
9. Position of Employees:
Human resource management treats the people as an asset who are to be used and developed for the organization. However, personnel management treats the workers as a tool that is expandable and replaceable.
Therefore, personnel function is headed by personnel manager who is supposed to know rules and regulations of personnel practices and he advises top management on personnel policies. Personnel management is considered a separate function like other functions. HRM, on the other hand is a part of every line function which is based on the assumption that primary job of every manager is to activating the workforce.